The Surprising Problem With Our Fractured Adtech Market: Too Many Options

It’s no secret that publishers face costly obstacles in light of an evolving media ecosystem. 

GDPR, CCPA, and other privacy legislation spurred an entirely new compliance industry, projected to grow to $6.6 billion by 2029, that adds substantial costs to budgets.

Software can cost in the tens of thousands of dollars per year to simply ensure data privacy compliance. These fees represent indefinite line items since legislation is continuing to evolve.

And that doesn’t factor in legal, governance, and new hires that specialize in these areas, not to mention the technical costs of implementation.

Meanwhile, publishers are also faced with the deprecation of the third-party cookie. This threatens their ability to monetize programmatically since the sharing of personal data across websites for ad targeting will no longer be possible – at least in traditional terms.

For some publishers that have not differentiated into other areas of the media business, programmatic advertising is their bread and butter. 

Taken together, this storm of events presents an existential threat to much of our media ecosystem, some of which comprises important journalism for a thriving and free democracy.

As a result, a huge number of adtech companies have popped up in order to help publishers navigate this ecosystem. The size of the adtech industry was $886.19 billion in 2022 and is expected to grow by 13.7% per year. And while these companies arrived on the scene to answer the call of continued digital transformation, the growth may actually be exacerbating the problem.

“In such a fractured space with dense technical jargon and very few experts, brands and publishers don’t know who to trust and many of them are left with negative feelings about engaging adtech companies,” says Tina Mulqueen, CMO of Lively Worldwide. “However, without adopting new tech solutions, they risk obsolescence.”

“I understand the frustration,” says Jake Abraham, Chief Commercial Officer at Audigent. “We work with brands, retailers and publishers who all suffer from ID fatigue. That’s primarily because most ID providers don’t have a clear value proposition and both the tech and forward-looking strategy can be difficult to digest.”  

Audigent has seen the adoption of their Hadron ID due to a unique approach, which uses Hadron’s real-time signals to trigger demand from the thousands of deals set up within their clients’ media buying platforms. This bridges the gap by allowing publishers to prepare for the future while enabling buyers to activate media as they always have, even in cookieless environments.

“Another thing publishers really struggle with is the ability to test identity solutions,” says Debra Fleenor, President of Adapex. “With so many new adtech companies offering their own solutions, it’s daunting and unreasonable to expect publishers to conduct their own research to see what monetization strategies are working, particularly since getting it wrong could put them out of business.”

Adapex has conducted its own research on the major identity solutions in the market, including Audigent’s. 

“What we’ve seen is that deploying identity solutions on cookieless browsers can represent meaningful revenue gains for publishers, but not all identity solutions are created equal for each respective publisher and browser. More research is needed to understand what identity solutions work best for each sector and audience demographic.”

Juan Mendoza, the founder of The Martech Weekly, recognized the problem. “I spend all of my time analyzing and writing about new martech and adtech solutions, and even I am not apprised of every company that’s making a meaningful impact on the sector,” he says. “In order to protect brands and publishers, there needs to be some way of accounting for the technical solutions that are truly solving problems in the industry.”

Mendoza launched TMW 100 award program for this reason. “We want a standardized way to assess the value of the businesses in our ecosystem,” he continues. “There’s more work to be done to professionalize the space and ensure that our marketing budgets are being spent on the right partners.”

Originally published on Smartech Daily.